Londonmetric Property Plc · LSE:LMP
Londonmetric Property — Metric Property Investments — FY2012 Earnings Presentation
43 slides from Londonmetric Property's earnings presentation, May 31, 2012
Slide 1: Full Year Results to March 2012
Full Year Results to March 2012 31st May 2012
Slide 2: Andrew Jones, Chief Executive
Andrew Jones Chief Executive Strong performance in a challenging world 2
Slide 3: Agenda
Agenda %XVLQHVV2YHUYLHZ«««««««««« Andrew Jones, Chief Executive )LQDQFLDO5HYLHZ««««««««««« Sue Ford, Finance Director ,QYHVWPHQW5HYLHZ««««««««««Valentine Beresford, Investment Director $VVHW0DQDJHPHQW 'HYHORSPHQW«««Mark Stirling, Retail Director 2XWORRN 3URVSHFWV««««««««««$QGUHZ-RQHV&KLHI(
Slide 4: Highlights
Highlights NAV up 5.9% to 107p (101p) PBT up 52% to £13.2m, (£8.8m), EPRA PBT up 500% to £6.6m (£1.1m) EPS up 600% to 3.5p (0.5p) DPS up 450% to 3.3p (0.6p) Rental income up 174% to £12.9m (£4.7m), like-for-like up 3.1% 25 occupier transactions Planning gains of c. 300,000 sq ft Buildi
Slide 5: Strong Returns Relative to IPD
Strong Returns Relative to IPD (1) (1) Capital Return vs IPD Property Total Return vs IPD (1) IPD All Retail Quarterly Benchmark 570 bps outperformance against IPD benchmark 5
Slide 6: Strong Returns Relative to IPD
Strong Returns Relative to IPD Superior property returns (1) (1) IPD All Retail Quarterly Benchmark 6
Slide 7: Delivering Valuation Surpluses
Delivering Valuation Surpluses £0.5m or 0.2% £6.1m or 2.7% £1.5m or 0.6% (1) (1) Metric's net one-third share of joint venture with USS Robust valuation surplus of £8.1m, up 3.5% 7
Slide 8: Occupational Activity
Occupational Activity Continuing to deliver rental growth in challenging markets Material increase in occupier transactions 8
Slide 9: Portfolio Metrics
Portfolio Metrics As at 31 March 2012 (1) (1) Weighted average unexpired lease term to first break 10.9 years Long leases with only 6% expiring in the next 5 years 9
Slide 10: Sue Ford, Finance Director
Sue Ford Finance Director Strong performance in a challenging world 10
Slide 11: Income Statement
Income Statement (1) (1) (1) After deducting property operating costs of £0.2m (2011: £0.1m) Rising income return with 2.3p dividend to be paid in July 2012 11
Slide 12: Movement in EPRA PBT
Movement in EPRA PBT Increase in rental income driving profit improvement 12
Slide 13: Building Income
Building Income Timing of passing rents (1) (2) (1) Passing rents reflect gross rental income of Metric and its one-third net share of MIPP (2) On existing developments, the majority coming from Kirkstall, Leeds Note: Assumes leases due for expiry are renewed Putting in place building blocks for i
Slide 14: Balance Sheet
Balance Sheet As at 31 March (£m) Portfolio value Investments Developments MIPP joint venture Net current assets Net debt Net assets EPRA NAV (p) LTV (%) 14
Slide 15: Movement in NAV
Movement in NAV METRIC (p) 112 110 - 108 - 106 104 - 102 - 100 96 T T T T 2011 Investments Developments EPRA Purchaser's Dividends 2012 reval'n reval'n profits cost paid 15
Slide 16: Future Capacity to Invest
Future Capacity to Invest (1) (1), (2) (1) Based on leveraging existing and anticipated properties at a 50% LTV and the availability of funds (2) The availability of these facilities is dependent upon the timing of completion of anticipated developments 16
Slide 17: Valentine Beresford, Investment Director
Valentine Beresford Investment Director Strong performance in a challenging world 17
Slide 18: Investments
Investments $FTXLUHGDVVHWVIRU P 0HWULF¶VVKDUH P ± Average yoc 6.6% rising to 7.8% once fully let ± higher yielding investments ± short cycle redevelopment opportunities ± 7RWDOIXUWKHUFDSH[FRPPLWPHQWVRI P 0HWULF¶VVKDUH P Sold Inverness for £9.7m generating a profit of £0.9m First high street ac
Slide 19: Redevelopments
Acquisitions for Metric Partnering Partnering Partnering Marks & Spencer, Berkhamsted 6W0DU\¶V5RDG6KHIILHOG Watling Street, Cannock Total capex £7.5m, yoc 7.3% Total capex £5.3m, yoc 10.9% Total capex £6.0m, yoc 7.6% Planning submitted for 21,000 sq ft 3&¶G')6WUDGLQJZHOO Onsite developing 24,700 sq
Slide 20: Acquisitions for MIPP
Acquisitions for MIPP MIPP MIPP Fleming Way, Swindon Sevenoaks Way, Orpington Total JV capex £10.2m, yoc 7.2% Total JV capex £6.3m, yoc 7.6% WAULT 19.8 years WAULT 14.7 years Post period end purchase MIPP MIPP Longwell Green, Bristol Faustina, Londonderry Total JV capex £7.8m, yoc 7.6% Total JV cape
Slide 21: St Austell Conditional Exchange
St Austell Conditional Exchange c. 90 acres conditionally acquired on the outskirts of St Austell Propose to develop a new 158,000 sq ft retail park ± Anchored by 68,000 sq ft 6DLQVEXU\¶VVXSHUPDUNHW SUHVROG Refilling our development pipeline 21
Slide 22: Mark Stirling, Retail Director
Mark Stirling Retail Director Strong performance in a challenging world 22
Slide 23: Valuation: £8.1m
Valuation: £8.1m Asset management yield shift = 27 bps inward 17% yield shift Asset New space management 49% actions New lettings 57% Market yield shift = 20 bps outward -23% yield shift Asset management actions more than offset adverse market yield shift 23
Slide 24: Asset Management – Occupier Activity
Asset Management ± Occupier Activity 2FFXSDQF\ULVLQJWRLQFOXGLQJOHWWLQJVLQVROLFLWRUV¶KDQGV Like-for-like rental growth 3.1%, average portfolio rents £1 psf higher than at purchase 3 Focus units 100% re-let ± B&Q, B&M, Paul Simon, Pets at Home Only 1 Peacocks unit in administration (£96,000 an
Slide 25: Asset Management – Planning Gains
Asset Management ± Planning Gains 80,500 sq ft of planning wins on existing portfolio 25
Slide 26: Bedford Update
Bedford Update BEFORE Asset management wins: Former Focus unit 100% re-let at rents 20% higher than previously passing Dunelm re-gear on new 15-year lease at £13.25 psf (vs £9.60 psf previously) Substantial refurbishment of £2m AFTER Surrender premium of £1.25m WAULT increased from 3.4 yea
Slide 27: Sheffield Update
Sheffield Update BEFORE AFTER Acquired former Uno store in May 2011 - Vacant for 8 years prior to acquisition Total capital invested £5.3m Agreed new 15 year lease with DFS at £18.75 psf Commenced onsite Nov-11 Practical completion Mar-12 DFS opened Apr-12 and trading above expectation
Slide 28: Redevelopments – Planning Gains
Redevelopments ± Planning Gains Delivered 217,300 sq ft of redevelopment planning consents 28
Slide 29: Status of Redevelopments
Status of Redevelopments Rental income (1) Anticipated rental income at Kirkstall, Leeds of £2.8m, of which To let comprises £1.7m or 63% 62% pre-OHW LQVROLFLWRUV¶KDQGV 29
Slide 30: Bishop Auckland Update
Bishop Auckland Update BEFORE CGI IMAGE Secured Open A1 planning consent 71% pre-let to Next, Boots, M&S, Brantano & Costa Coffee LQVROLFLWRUV¶KDQGV Rental £16.50 - £27.50 psf Onsite with PC expected Nov-12 Yield on cost 8.8% Phase II under option for additional 2.8 acres Submitted p
Slide 31: Leeds Update
Leeds Update BEFORE CGI IMAGE Open A1 shopping park ± 105,000 sq ft 20% pre-let to BHS & Outfit LQVROLFLWRUV¶KDQGVZLWK0 6-' Sports and Costa Coffee Estimated rent roll £2.8m Cost to complete £21.7m Yield on cost 7.9% 31
Slide 32: Andrew Jones, Chief Executive
Andrew Jones Chief Executive Strong performance in a challenging world 32
Slide 33: Retail Market Outlook
Retail Market Outlook Consumer disposable income under pressure Administrations up 38% in Q1-12: 670 vs 486 in Q4-11 Fewer retail destinations taking larger slice of retail sales Rightsizing of store portfolios is even more prevalent ± Too many retailers have too many shops Occupier mobility
Slide 34: UK Lease Expiry Profile to 2020
UK Lease Expiry Profile to 2020 Source: Jones Lang LaSalle, Metric 52% of high street and shopping centre leases will expire by 2015 34
Slide 35: Retailers Expanding
Retailers Expanding Increasing vacancies are creating growth opportunities: Home (1) Convenience food Private equity (1) Dunelm net worth derived from market capitalisation as at 30 May 2012, with remaining coming from 2012 Sunday Times Rich List 35
Slide 36: Investment Market Outlook
Investment Market Outlook Income security & longevity is the key pricing metric Vendor refinancing pressures are creating more opportunities ± Banks now unloading assets and debts ± Receivership opportunities rising Financing is harder and is more expensive ± Debt buyers retreating Looking a
Slide 37: Prospects
Prospects Deploy capital into accretive: ± High income opportunities on operationally strong real estate ± Retailer partnering positions ± 295,000 sq ft redevelopment pipeline ± Investments with asset management growth Undrawn committed facilities of £80m Performance driven by management induc
Slide 38: Appendix
Appendix Strong performance in a challenging world 38
Slide 39: Timing & Cost to Complete of Developments
Timing & Cost to Complete of Developments (1) Based on financial year ended 31-Mar (3) YOC on PC = estimated yield on cost on practical completion (2) CTC = estimated cost to complete (4) Conditional on receiving planning consent Average yield on cost at PC 8.4% 39
Slide 40: Top 10 Tenant Exposure
Top 10 Tenant Exposure (weighted by gross income %) (1) (2) (1) Gross rental income includes £1.2m of rental income from post year end and acquisitions, GHDOVLQVROLFLWRUV¶KDQGVDQGRXWVWDQGLQJUHQW reviews (2) Market capitalisation as at 30 May 2012 Granularity of income increasing 40
Slide 41: Current Portfolio Metrics
Current Portfolio Metrics (1) (1) Investment and MIPP retail portfolios as at 30-May-12. Figures based on net exposure. (2) Weighted average unexpired lease term to expiry (11.1 years to first break) (3) Management view of sustainable rent - not tied to valuer's ERV - sustainable rent only provided
Slide 42: £243.3m Portfolio Across 22 Schemes
£243.3m Portfolio Across 22 Schemes (1) (1) The investment portfolio represents the valuation as at 31 March 2012 of £237.5m including post period end acquisition of LondonGHUU\ZLWK0HWULF¶VRQH-third share o f assets held in MIPP at £5.8m 42
Slide 43: Metric Property Investments
DA METRIC | to We INVESTMENTS PLC www.metricproperty.co.uk
Metric Property Investments — FY2012 Earnings Presentation on 6ix